The German Federal Ministry for the Environment and the Federal Ministry of Economics have jointly proposed a draft legal framework for the potential use of fracking. These propositions mark a first step towards the potential future licensing of the technology.

Fracking involves a mixture of water, sand and chemicals being pumped at high pressure through a borehole into an underground rock reservoir. The increase in pressure in the rock causes fractures to form, which then enhance the gas permeability of the rock. The sand and part of the chemicals remain in the rock to stabilise the fractures, while a large portion of the water is then pumped back (so-called flowback). Afterwards the gas that was originally trapped in the rock can be extracted.

The use of fracking is highly controversial and led to much public debate. On the one hand, Germany has substantial natural gas reserves, where gas can only be extracted with the aid of fracking technology. Fracking could therefore ensure an additional low carbon energy supply. On the other hand, it has been argued that fracking could pose serious hazards for the environment, particularly in relation to the protection and safety of drinking water.

As a result of concerns regarding the potential environmental hazards, the German federal state of North Rhine-Westphalia has passed a decree that prohibits fracking until further analysis has been carried out: consequently permission to extract gas will now only be issued if companies commit to refrain from using fracking technologies. Further, the Bundesrat (representatives of the German federal states) has recently passed a resolution against the use of fracking until all potential risks are further analysed.

Meanwhile, recent draft legislation published by the German Federal government arguably takes a different tack. Rather than prohibiting the use of fracking, it provides a framework for conducting fracking projects that would see amendments to both the Federal Water Act (Wasserhaushaltsgesetz) and the Regulation on the Environmental Impact Assessment (EIA) of Projects related to Mining (Verordnung über die UVP bergbaulicher Vorhaben). The proposed framework proposes:

  • introducing an obligation to conduct an EIA (including public participation) prior to commencing any fracking project, whether for the exploration or exploitation of natural gas;
  • prohibiting fracking in water protection areas and mineral spring protection areas (around 15 per cent of the total area of Germany);
  • introducing an obligation to divulge the fluids to be used for fracking; and
  • ensuring the participation of the water authorities in the permitting procedures for new fracking projects.

In light of the other developments mentioned above, the proposed framework clarifies that fracking is licensable, in principle. The publication of the draft legislation marks an important first step in the regulation of fracking and the development of such projects in Germany. However, as some of the amendments are still subject to the approval of the Bundesrat, it remains to be seen what changes will be made during the legislative procedure.